YouTube Will Help Creators Make Money With More Than Just Ads

The Alphabet-owned video giant is now offering creators merchandise deals, a $4.99 subscription service for fans, and more.

HOTLITTLEPOTATO

Over the last year, YouTube has faced a seemingly endless number of controversies over disturbing and problematic videos—including ones published by PewDiePie, the site’s most popular vlogger—that were often found to be running advertisements from major companies. In response, YouTube tightened its ad policies, hired new moderators, and took steps to assure advertisers that its platform was brand safe. An unintended result of those fixes was that many creators, often for confusing or unexplained reasons, had their videos “demonetized,” meaning they could no longer receive ad revenue. Some smaller creators also had the privilege of running ads revoked altogether under YouTube's new policies.

On Thursday, YouTube offered its creators a much-needed olive branch: It announced that it will expand the ways they can make money. Currently, most creators earn an income through YouTube's 55 percent advertising revenue split. Soon, certain creators will be able to offer $4.99 exclusive content monthly subscriptions to their fans, and sell merchandise directly through YouTube's platform, among other monetization schemes. The announcement comes the same week that Facebook and Instagram both releasednew features aimed at luring away the kinds of video creators who once primarily made content for YouTube.

Like, Subscribe, and Buy My T-Shirts

Here's how the new monetization options will work: Creators who have at least 10,000 subscribers will have the option to sell merchandise through a discount deal YouTube brokered with the distributor Teespring, which will give them $1 off each item. As anyone who has seen Jake Paul's Christmas merchandise hype video knows, YouTube creators have long sold their own swag to fans, including through Teespring.

What's changing now is that YouTube, at least to United States viewers, will display a merchandise "shelf" below eligible videos, turning the platform into a kind of virtual store (though you'll still need to make the purchase directly through Teespring). Merchandise won't make sense for every creator, but it can be a huge source of revenue for some. YouTube has already been testing the feature with a small group of users; the company says that Lucas the Spider—a YouTube channel that has published just 10 videos featuring an animated arachnid—earned over $1 million in less than a month.

YouTube

Creators will have the option to hawk more than just their own merchandise in the shelf below their videos. In 2016, YouTube acquired FameBit, an agency that connects video creators with companies who want to sponsor their content. On branded FameBit videos, companies will now have the option to display relevant products in that same shelf. You can imagine, for example, a beauty vlogger featuring the lipstick she's marketing. The new shelf won't ensure YouTubers make more money through branded deals, but it might make their sponsored content more effective, leading to higher partnership rates.

YouTube is also launching a channel sponsorship service, which allows creators to charge a $4.99 fee to fans in exchange for access to exclusive content (30 percent of which is collected by YouTube). For now, the fee is fixed and the feature is only available to channels with over 100,000 subscribers that fit other criteria as well. Paying fans will get perks like custom emoji and exclusive videos.

"We're seeing [membership perks] be lightweight content—bloopers, playing with their dog," says Rohit Dhawan, who leads alternative monetization products at YouTube. "It's whatever they want to come up with."

Lastly, YouTube is launching YouTube Premieres, which are essentially landing pages for pre-recorded videos to debut at a specific time and place; it’s YouTube's take on a traditional television premiere. Creators have always hyped upcoming videos on other social platforms like Twitter and Instagram, but Premieres will allow them to do so with a specific link where the video will go live. It also presents a new revenue opportunity: Premieres will have Super Chat, a feature where fans can pay to send prioritized messages to creators, which was previously reserved for livestreams. It will be open to all YouTubers.

YouTube

It’s worth noting that all of these new monetization opportunities will only be available to creators who are in good standing with YouTube—and not those who have broken the platform’s Community Guidelines.

Demonetization Blues

It remains to be seen whether YouTube's new alternative monetization schemes will be enough to appease disgruntled creators, who have spoken out about YouTube's confusing and constantly shifting ad policies for over a year. For one, designing and setting up a merchandise store, as well as creating extra content for paying members, represents more work. Many YouTubers' concerns also aren't directly about making more money.

Many simply want "clarity and consistency in the way that policies get enforced," says Anthony D'Angelo, the executive director of the Internet Creators Guild, a trade group that represents YouTubers and other online creators.

D'Angelo points to an incident from June, in which transgender YouTuber Chase Ross said that videos he published with the words "trans" or "transgender" in the title were being demonetized, without explanation.

"The second I added the word transgender, it was automatically demonetized," he said in one video. "It's a trigger word, it triggers the algorithm."

Ross had posted screenshots a year earlier that allegedly document the same issue.

Even worse, Ross, as well as a number of other fans and creators, noticed that ads for the Alliance Defending Freedom—an organization that has linked homosexuality to pedophilia—were running on LGBTQ videos. The Alliance Defending Freedom has been classified as a hate group by the Southern Poverty Law Center. The incident served to further upset already jaded creators.

Last August, YouTube rolled out a process for creators to appeal when their videos are demonetized. Many YouTubers were grateful for the ability to potentially get demonetization decisions reversed, but were also disgruntled at YouTube's handling of the process, specifically the decision to prioritize appeals from larger creators first. The appeals process can also be time-consuming, and even if YouTube does reverse the decision, it doesn’t necessarily make up for lost income.

"If we get demonetized within the first 24 hours, that's an eternity for a video, most creators are making most of their money and most of their views in the first 24 or 48 hours," says D'Angelo. "The time spent on filling out appeals would be much better spent making content."

Despite these difficulties, YouTube says that a greater number of creators are making more money than ever. Since last year, the number of YouTubers earning five figures is up by 35 percent, and the number earning six figures is up 40 percent, according to the company. For now, YouTube also remains the best place for aspiring online stars to secure that income. Other platforms—with some exceptions—have largely yet to figure out how to compensate the people who have helped make them what they are. YouTube, on the other hand, has been doing it for over a decade.

Over the last year, YouTube has faced a seemingly endless number of controversies over disturbing and problematic videos—including ones published by PewDiePie, the site’s most popular vlogger—that were often found to be running advertisements from major companies. In response, YouTube tightened its ad policies, hired new moderators, and took steps to assure advertisers that its platform was brand safe. An unintended result of those fixes was that many creators, often for confusing or unexplained reasons, had their videos “demonetized,” meaning they could no longer receive ad revenue. Some smaller creators also had the privilege of running ads revoked altogether under YouTube's new policies.